Claim: Rocco Rossi said enforcing the plastic bag fee costs taxpayers $2 million every year even though none of the proceeds go into city coffers.

Background: During a January speech to the Empire Club of Canada, Rossi railed against the five-cent plastic bag fee.

“These bags cost less than a penny to produce but the city receives no share of the five cents you and I pay every time we purchase one,” he said.

“The city also created an enforcement bureaucracy that costs taxpayers $2 million annually.”

He later said the fee should be abolished since the city isn’t receiving any of the money.

Smell test: According to the Canadian Plastics Industry Association, each bag costs up to a penny-and-a-half to produce. When retailers charge consumers a nickel per bag (a roughly 400 per cent markup), the profits stay in the till.

The city implemented the fee to encourage more environmentally-sound habits, but doesn’t receive any of the money, nor can it tell retailers how to spend it. In January, officials with the plastics industry estimated the profits from bag fees to be about $15 million. (Several large chains donate part of the proceeds to charities.)

In 2010, the city budgeted $1.4 million for its 70 per cent diversion program. So far this year, the city has spent $500,000.